China trade: exporters poised to maintain short-term growth amid Omicron, but downside risks threaten full 2022 outlook

China’s trade surplus with the United States and the rest of the world increased to record levels in 2021 despite geopolitical tensions and supply-chain disruptions

Analysts say global coronavirus restrictions could continue to benefit China’s shipments of electronics and pandemic-related items in the coming months

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China’s exports grew by 29.9 per cent in 2021, year on year, while imports increased by 30.1 per cent over the same period. Photo: AFP

Published: 12:00am, 15 Jan 2022Updated: 3:24pm, 17 Jan 2022

Corrected [3:23pm, 17 Jan, 2022]

[3:23pm, 17 Jan, 2022]
In the second paragraph, China's trade surplus with the rest of the world was corrected from US$67.64 billion toUS$676.43 billion

China’s export machine is expected to keep roaring over the short term due to the global spread of Omicron, but Beijing has warned of increasing downside risks in 2022 after the nation’s exporters saw record-high exports last year.

Despite geopolitical tensions with the US and global disruptions of supply chains during the pandemic, China’s trade surplus with the rest of the world rose 29 per cent in 2021 from a year prior, to US$676.43 billion – the highest since record-keeping began in 1950, according to Chinese customs data released on Friday.

Its trade surplus with the United States also reached a record high US$396.58 billion in 2021, amid a protracted rivalry between the world’s two largest economies.

Diplomatic frictions over alleged human rights abuses in Xinjiang did not stop China from registering a 57.4 per cent rise in its annual trade surplus with the European Union last year, when the country’s trade deficit with Australia widened by 60.4 per cent as imports grew faster than exports despite their ongoing bilateral trade conflict.

“As other markets face reduced production in light of increased [Omicron] cases, Chinese manufacturers can likely maintain their global market share,” Erin Xin, an economist at HSBC, said in a note on Friday.

For all of 2021, China’s exports grew 29.9 per cent, year on year, while imports grew by 30.1 per cent, the official data shows. In December, exports grew by 20.9 per cent and imports grew by 19.5 per cent, both slowing from November’s growth rates.

Xin said there was likely to be continuous support for China’s exports in the near future, especially given the resilient foreign demand for pandemic-related goods.